Crazy-Sounding Tax Deductions That Are Actually Legal To Use
Now that the new year is upon us, before you know it, it will be time to file your taxes. Soon, tax documents like your W-2 will begin tumbling in, and you'll have to start assembling all of your receipts and documentation so you can claim your tax deductions. When it comes to lowering your taxes, however, sometimes it pays to think outside the box. In addition to all of the regular deductions you're likely used to claiming, there are a host of unusual tax deductions and credits that might lower your tax bill even more.
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Here's a list of unusual ways people have lowered their tax bills. Although some of these obscure options may not apply to your own personal financial situation, think of them as inspiration to get creative when it comes to your deductions and credits. Remember that while it's against the law to evade your taxes, it's perfectly within your rights to avoid them to the limits of the law.
Private Jet Travel
Most people who can afford flying on their own private jet are looking for as many tax deductions as they can get. In some cases, flying on your own personal jet may actually save you a few bucks. If you're using your personal aircraft for a business purpose, the IRS has ruled that you can deduct those costs from your taxes.
For example, let's say you own a rental condo in Arizona but you live in California. If you have to fly there to manage your property, you may be able to recoup some of those costs.
Did you replace an old toilet with a new one this year? You might qualify for a tax credit. Many state and local governments offer credits for installing energy-efficient appliances, such as low-flow toilets. On the federal level, you can get energy equipment tax credits for various home upgrades, such as up to $2,000 annually for a biomass stove or water heater or 10% of the cost of insulation or certain windows or doors, up to a credit of $500.
Your Instagram Pet
If you've got a photogenic pet, you may have an avenue to an unusual tax deduction. If you post photos of your pet online and they go viral, you may be able to deduct your pet expenses. As with all of these unusual deductions, you'll have to qualify your pet as a business in order to deduct your expenses. However, if you pass the IRS tests, anything related to promoting your pet as an internet superstar could be a tax write-off for you.
Putting a pool into your backyard can often be a costly renovation that triggers high annual expenses. If you're looking to recoup some of those expenses, there is a way -- but it all depends on your doctor. Pool expenses can qualify as a legitimate tax deduction if you have a medically necessary reason to have the pool. For example, if your doctor requires you to swim to counteract some health problem, your pool expenses could become deductible.
Your House Plants
House plants can brighten your mood, add oxygen to your home and beautify your surroundings. In some cases, they may even save you some money on your taxes.
In 2020, workers around the world had to stay at home and couldn't use their offices to entertain their clients. If this is a central part of your job and you use your home for that purpose, the money you spent on improving the environment to make it more client-friendly can indeed qualify as a legitimate business expense.
As with all of the deductions on this list, you can't take them unless they specifically qualify as a valid deduction in your own personal or business life. The cat food deduction is a great example of this. While you can't write off what you feed your personal house cat every day, you may qualify for a deduction if you use pet food for certain purposes. Specifically, the IRS has allowed deductions for pet food used to attract wild cats that keep rat and rodent infestations down at a business.
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